When you use a LONG RAW, you intend to store large data such as sound, image etc., but NVL can only make a substitute for a character or a number, definitely not for this datatype.
I got this from Metalink:
Normal SQL functions do not operate on raws. Use UTL_RAW package to operate on raw columns. To install the package run utlraw.sql script. Also go through utlraw.sql script.